AT&T Mobility's fourth quarter looks sad compared to T-Mobile and Verizon
AT&T reported its fourth quarter earnings today, and the company fell short of analyst's expectations for its wireless operations. For the three month period that ran from October through December, AT&T added 134,000 net postpaid phone subscribers; Wall Street expected a gain of 208,000 customers for this category. Churn was 1%, up 11 basis points from the .89% recorded during the same quarter in 2017. The carrier added 13,000 postpaid pre-paid phone net additions.
T-Mobile added 1 million net postpaid phone subscribers, more than seven times the amount added by AT&T. Verizon tacked on 650,000 new postpaid phone subscribers during the last three months of the year.Jonathan Chaplin, an analyst with New Street Research, blamed the increase in churn on the heavy traffic that is slowing down AT&T's wireless network. Chaplin compared this to the extra capacity that T-Mobile has been adding to its network. For its fourth quarter,
Service revenue for AT&T Mobility rose 2.9% with an 18.7% rise in operating income. Earnings before interest, taxes, and amortization (EBITA), a measure of profitability, rose 13.3%. The company added to its base 304,000 postpaid smartphones and 467,000 branded smartphones. For the whole wireless segment, AT&T had 3.8 million net additions in North America. Connected devices and smartphones were responsible for 2.8 million net additions in the states, with 1 million net additions in Mexico.
The entire company reported revenue of $48 billion for the fourth quarter, missing Wall Street forecasts for $48.5 billion. Still, the figure was up from the $41.6 billion recorded during the same quarter the previous year. Net income was $4.9 billion for the three month period compared to an adjusted $19 billion for the 2017 fourth quarter. That period was impacted by tax reform during 2017.
For all of 2018, AT&T grossed $170.8 billion, up from the prior year's $160.5 billion. Full year net was $19.4 billion versus $29.5 billion for 2017. That year, earnings were bolstered by the 2017 tax law change.
Investors were not pleased with the report as shares of AT&T declined $1.32, or 4.3% to $29.37 following the release of the report.